Dublin, Milan and Madrid top the rankings of European ‘hot’ cities for hotel investment according to new research by international real estate advisor Savills.
The new analysis ranks cities according to their underlying operational performance fundamentals and relative value, including the overnight visitor market, GDP and employment growth forecasts.
'The analysis highlighted there are still a number of cities in Europe that offer good ‘value’ prospects in light of the outlook for operational performance going forward,' commented Tim Stoyle, head of hotels valuation at Savills. 'Top ranking Dublin for example has been one of the best performing European cities in terms of RevPAR (revenue per available room) growth over recent years which looks set to continue as new development remains constrained.'
While Dublin, Milan and Madrid took the top three spots, London and Barcelona also made it into the top five. The second half of the chart ranked Amsterdam, Budapest, Rome, Paris and Berlin in that order.
Savills said that stock levels relative to demand and indicative prime yields as of Q1 2017 were also factored into the city ranking. According to the advisor, the top 10 are markets where the prospects for income security alongside capital preservation and capital growth look robust going forward.
'Across Europe we are seeing increasing interest from investors looking for both the income and capital value growth provided by hotels,' added Rob Stapleton, director in the hotels team at Savills. 'Dublin has experienced a recent rise in institutional investment whereas markets like Milan and Madrid being driven by private equity investors and owner-occupiers looking for hotels with both development and income growth potential,' he concluded.
